Shree Cement to acquire majority stake in Union Cement Company of UAE

The Board of Directors of Shree Cement Limited today approved the acquisition of a majority equity stake (minimum 92.83%), in its meeting held today, considered and approved the acquisition of a majority equity stake (minimum 92.83%) in Union Cement Company (UCC), based in the United Arab Emirates (UAE), for an enterprise value of $ 305.24 million, excluding cash and cash  equivalents, subject to closing adjustments.
Established in 1972, UCC is one of the leading cement manufacturers in the UAE and is a listed company on the Abu Dhabi Securities Exchange (ADX).
It has its operations in Ras Al-Khaimah, one of the seven emirates that make up the UAE federation, with a clinker capacity of 3.30 MTPA and cement capacity of 4.00 MTPA, a press release from Shree Cements said.
UCC  deals with a variety of cements like Ordinary Portland Cement, Sulphate Resisting Cement and Oil-Well Cement. The plant is located in close proximity to the Ras AlKhaimah's Saqr Port which helps it to serve the export markets of Gulf, Middle East and East Africa, the release said.
UCC has one subsidiary, UCC Norcem, in which it owns a 60% stake, which is engaged in the marketing of Oil Well Cement.
The release said UCC had a "consistent track record of stable performance". For the calendar year 2016, UCC reported consolidated revenue of US$ 153.42 million and EBITDA of $ 33.73 million (excluding investment and other income). For the nine months ended 30th September 2017, the reported consolidated revenue was $ 120.27 million and EBITDA of $ 25.97 million (excluding investment and other income).
"The acquisition is subject to the conversion of UCC from a 'public joint stock company' into a 'private joint stock company', delisting from ADX (subject to UAE regulatory approval) and other conditions precedent and is expected to be completed in approximately nine months.
With this acquisition, the aggregate cement capacity of Shree Cement will increase from present 29.3 MTPA to 33.3 MTPA. The proposed acquisition will help Shree Cement create its first footprint outside India. UAE is one of the major economies in the Middle East which has good long-term prospects in the housing, construction and infrastructure segment.
Baker Tilly DHC, Standard Chartered Bank and Freshfields Bruckhaus Deringer acted as advisers to Shree Cement Limited on the proposed acquisition, the release added.
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